After a hot first quarter, the stock markets cooled last week just as Minnesota started to warm.
But a close look at Minnesota's 100 largest public companies for the first quarter of 2013 shows some surprising winners. Two examples: Shares of Supervalu and Best Buy jumped 104 percent and 88 percent, respectively, in the first quarter.
Both the big-box retailer and the grocery wholesaler had struggled for years. But in recent weeks, stocks of both companies have recovered as new leadership implemented turnaround strategies that seem to be working.
Overall, the Bloomberg-Star Tribune index of Minnesota's largest public companies rose 12 percent during the first quarter, compared with 10.6 percent for the Standard & Poor's 500 index of America's largest companies and 12.4 percent for the Russell 2000 index of smaller-capitalization stocks.
Other one-quarter wonders included ValueVision Media (up 92 percent) and Cardiovascular Systems (63 percent).
We also looked for long-haul performers over the last four years. During the depths of the financial crisis, stocks hit their bear-market lows on March 9, 2009. Since then, the Star Tribune 100 has delivered total annualized returns (including dividends) of 28 percent. That compares to 25.7 percent for the Standard & Poor's 500 and 30.4 percent for the Russell 2000.
Premium mattress maker Select Comfort is far and away the leader for this period. It survived a near-death experience during the recession as consumers abandoned luxury purchases. Select shares traded below $1 for much of 2008 and 2009. But over the last four years, Select delivered total annualized returns of 194 percent.
Other notable long-haul performers include ATV makers Arctic Cat (up 100 percent) and Polaris (92 percent).
Patient investors, thanks partly to economic growth fueled by the Federal Reserve's money pump and resulting low-interest rates, have been well rewarded.
"Many retail investors are jumping back into stocks because bonds offer so little yield, and they are worried they are missing out on the stock market rebound," said Keith Tufte, president of the wealth management group at Adam Smith Advisors in Minnetonka. "I think they are late to the party at this point.''
Most of the "easy money" may have been made over the last 15 months.
Still, this market, which traded Friday at less than 15 times projected S&P 500 per-share earnings of about $105 this year, is far cheaper than the 20-plus price-to-earnings ratio seen before the market collapses of 2001-02 and 2007-09. The lagging piece of the recovery is the nearly 3 million still unemployed out of 9 million who lost jobs in 2008 and 2009.
"After such a significant rally over the recent quarter, and even greater rally since 2009, it is clear that the low-hanging fruit has been picked,'' said Harrison Grodnick, portfolio manager at Minneapolis Portfolio Management Group.
"It is difficult to predict what the next six or nine months may bring … pullbacks are healthy and normal to our markets."
Other star performers
Besides Select Comfort, the best four-year Minnesota performers include:
• Deluxe Corp, which rose 29 percent in the first quarter and returned 67 percent annually to shareholders over the last four years, has hit five-year high prices as investors continue to buy management's successful diversification from a provider of checks to an array of printed and digital forms and Web-based solutions.
• Tennant Co., which makes industrial cleaning equipment that uses less water and chemicals, may be a proxy for increased activity in the nation's factories and warehouses. Tennant rose 10.9 percent in the first quarter and 60 percent annually over the last four years.
• Ameriprise Financial, the Minneapolis-based financial planning and investment company, has been the best-performing financial stock since 2009. Ameriprise, also a successful buyer of smaller mutual fund operators, was up 18 percent in the first quarter and 54 percent annually since 2009.
Meanwhile, Dolan Companies, the legal-and-financial publisher that boomed during the foreclosure crisis, was down 38 percent in the first quarter and 21 percent since 2009.
Where are we headed?
"Warren Buffett says to be fearful [sell] when others are greedy and to be greedy [buy] when others are fearful," Tufte said. "I think there will be better times to add to stock positions later this year."
Patrick Kennedy contributed research for this column.
Neal St. Anthony • 612-673-7206